Monday, May 4, 2009


I got lucky and won quite a bit of money at the slot machines. I got a form from the casino showing my winnings. Can I deduct my losses? Are there any other deductions like driving back and forth to the track and casino? What about the losses I had in the previous years?


Wanda, you may be able to deduct your losses but only the losses in the year that you had the winnings. In order to take your losses you must itemize your deductions. If you do not itemize you cannot take the losses. You cannot go back and take the losses in prior years. Finally, since this is not a "trade or business," your mileage would not be deductible.

Here are some general guidelines on gambling income and losses:
  • Gambling income includes, but is not limited to, winnings from lotteries, raffles, horse and dog races and casinos, as well as the fair market value of prizes such as cars, houses, trips or other noncash prizes.

  • Reporting winnings: The full amount of your gambling winnings for the year must be reported on line 21, Form 1040. You may not use Form 1040A or 1040EZ. This rule applies regardless of the amount and regardless of whether you receive a Form W-2G or any other reporting form.

  • Deducting losses: If you itemize deductions, you can deduct your gambling losses for the year on line 28, Schedule A (Form 1040).

  • You cannot deduct gambling losses that are more than your winnings.

  • It is important to keep an accurate diary or similar record of your gambling winnings and losses. To deduct your losses, you must be able to provide receipts, tickets, statements or other records that show the amount of both your winnings and losses.

Good luck.

Larry Kopsa CPA